AZERBAIJAN - AIOC & Socar Raising Northern Route Exports.

Sources at the Russian terminal of Novorossiysk was on June 30 reported as saying both AIOC and Socar planned to to increase crude oil shipment through the port in July to 460,000 tons. AIOC was to send 340,000 tons of crude oil to be unloaded by three tankers batches, while SOCAR was sending another 120,000 tons of crude.

Tariff for the pumping of 1 ton of crude oil via the Baku-Novorossiysk pipeline is $15.67. Novorossiysk is Russia's largest port on the Black Sea. (The first batch of AIOC's crude oil exports through Novorossiysk crossed the Azerbaijani border on Feb. 28, 1998. That shipment had been caught in a dispute between AIOC and the Russian authorities over a demand for additional customs duties, levied by Russia's state oil pipeline company Transneft. The matter was settled later under the terms of an inter-governmental agreement, whereby AIOC and Socal were to pay $15.67/ton to Transneft (see background in Vol. 63, OMT 3).

The Western Route: While Socar exports its share of AIOC's production and some of its own output through the pipeline to Novorossiysk, AIOC exports some of its share through the Western Route via Georgia. On stream since April 1999, this runs 917 km from Baku's terminal and storage farm of Sangachal to the Georgian port of Supsa and has a capacity of 100,000 b/d.

The pipeline cost $590m, compared to an original estimate of $315m. Georgia earns $7m and the government of Azerbaijan gets $10m in annual oil transit tariffs from the Western Route.

Iran Rules Out BTC Sabotage: Iranian Deputy Foreign Minister Alireza Attar in May 2006 dismissed as groundless reports that Iran might attack the BTC pipeline in the event of a US strike on the Shi'te theocracy of Tehran. Western powers suspect Iran of seeking nuclear weapons under the cover of a civilian atomic programme, which Iran denies saying its uranium enrichment activities are peaceful. The US has not ruled out a strike on Iran.

Earlier reports had quoted the head of Iran's Supreme National Security Council (SNSC) and Iran's chief nuclear neotiator, Ali Larijani, as saying that Iran may bomb the $4 bn pipeline and other vital oil installations in the Caspian region if the US used Azeri territory to carry out military action against his country.

Attar said publication of such reports was aimed at presenting Iran as a source of threat for the region, adding: "This is a lie. This has not happened and will never happen. I am officially stating that these reports are false. We are a brotherly nation to Azerbaijan".